Good morning!
Grain futures weaker overnight… At 6:00 a.m. CDT, December corn was down 6 cents. November soybeans were down 5 1/2 cents. September soybean meal was down $1.80 and September bean oil was up 18 points and hit a three-week high. December SRW wheat was down 3 cents and December HRW was 5 cents lower. The bulls are fading fast late this week, following strong gains to kick off the week. This type of higher daily price volatility is typical of a summertime weather market in the grains. No serious technical damage has been inflicted in the grains with the price downdrafts that are being led by corn. However, significant selling pressure in the grains to end this trading week would likely produce some chart damage to begin to suggest this summertime weather market was only a flash in the pan. Traders are looking forward to this morning’s weekly USDA export sales report and then Friday’s late-morning USDA monthly supply and demand report. For a historical perspective on U.S. wheat production and planting trends, click here for a very informative story by Debbie Carlson. The key outside markets today see the U.S. dollar index near steady. August Nymex WTI crude oil prices are slightly higher and trading around $74.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.56%.
U.S., Iran trade military strikes… The U.S. military struck Iran for a second day and Tehran retaliated against American allies in the Persian Gulf, raising fears that the tit-for-tat attacks may derail talks on a permanent peace deal. U.S. Central Command said on X it hit about 90 targets on Wednesday “to further degrade” the Islamic Republic’s ability to attack commercial shipping in the Strait of Hormuz. Iran responded by targeting U.S. bases in Bahrain, Kuwait and Qatar, according to the semi-official Iranian Students’ News Agency and as reported by Bloomberg. “We just hit them very hard, and I say we hit them 20 to 1. Every time they hit us, we’ll hit them 20,” President Trump told reporters on Air Force One. “I don’t know. We’d win it very quickly. We have many ways we could win,” Trump said when he was asked whether the U.S. and Iran were returning to an all-out war. Centcom said it targeted Iran’s air defense systems, coastal surveillance assets, and missile and drone storage sites.
New World screwworm cases detected in U.S. now at 33 over the last 30 days… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is reporting 33 total New World screwworm detected cases in the U.S. the past 30 days and all still in Texas and New Mexico. There are 19 active cases, all still in Texas.
“Impressive” high-pressure ridge building over the Rockies… In a special report issued Wednesday afternoon, World Weather Inc. said “an impressive ridge of high pressure will build through the Rocky Mountain region to the Great Plains and a part of southern Canada’s Prairies over the next few days.” The ridge will suppress rainfall for a week to nearly 10 days and it will induce several days of very warm to hot temperatures. The result of this mix will be a notable dry-down period for the northern U.S. Plains and northwestern corn and soybean belt that will stress dryland crops, especially in areas of low soil moisture which includes portions of Nebraska, South Dakota, southwestern Minnesota and northwestern Iowa. Late July and early August weather will need to be wetter and milder to protect production potential,” said the forecaster.
U.S. farmers paying significantly more for crop inputs than Brazil farmers: NCGA… A report released by the National Corn Growers Association on Wednesday shows the price premiums U.S. farmers pay for their inputs compared to Brazilian farmers, their largest global competitor, are in some cases more than double the costs paid by farmers in South America. “I think there has long been a belief among U.S. farmers that we pay more for the same products compared to our international counterparts,” said Matt Frostic, Michigan farmer and NCGA first vice president. “This work confirms our fears: we are paying substantially more for our inputs. But the price gouging that is happening for U.S. farmers is even worse than many of us suspected.” The report’s findings include: Across all corn seed comparisons, U.S. prices were considerably higher, averaging a 68% premium over Brazil from 2023–2025. Fungicides show some of the largest price differences, with some comparisons showing U.S. prices more than double Brazilian levels depending on the crop, product category, active ingredient and year. Across corn and soybeans, U.S. herbicide prices were higher than Brazilian prices, with many comparisons showing U.S. prices near double Brazil’s levels. Insecticide gaps varied by crop but often favored Brazil: U.S. corn insecticide prices were materially higher, averaging 87% higher from 2023 to 2025.NCGA is calling for increased transparency from input providers and for pricing to better reflect the realities of the current economic environment. It is also pursuing policy initiatives that will make U.S. farmers more globally competitive, said the NCGA. Read more here.
FOMC minutes show a divided Federal Reserve… Fed officials were divided on the future of U.S. interest rates and discussed a range of scenarios for the evolution of the economy and monetary policy, minutes from the FOMC meeting in June showed. Participants generally assessed that upside risks to inflation remained elevated and a few commented that in light of these developments there was a case for raising interest rates. Most participants also pointed to scenarios in which, in the context of stable labor market conditions, inflation would remain elevated due to strong AI-related demand, the conflict in the Middle East, or the effects of tariffs. In such scenarios, almost all the FOMC participants indicated that some policy firming would likely be warranted to return inflation to 2%. However, under their most likely economic outlook, many Fed officials expected interest rates to end the year at or slightly below their current level. The Fed kept the federal funds rate unchanged at 3.50%-3.75% in June, in line with expectations. TradingEconomics.com
China’s annual inflation rate cools… China’s annual inflation eased to 1.0% in June from 1.2% in both April and May, slightly below market expectations of 1.1%, marking the softest increase in three months. Non-food inflation slowed (1.5% vs 1.9% in May) due to a moderation in transport costs (4.1% vs 5.4%), as the government cut domestic retail gasoline and diesel prices in June amid lower energy prices following an easing of the Middle East conflict. On the food side, prices fell for the third consecutive month (-1.6% vs -1.7%), largely due to persistently weak pork prices and continued declines in fresh fruit prices. Core inflation, excluding food and energy, increased 1.0% year-on-year, following a 1.1% rise in May. On a monthly basis, consumer prices fell 0.3% after edging down 0.1% in May, compared with market forecasts of a 0.2% decline.
France aims to become more self-sufficient on fertilizer… France will invest 2 billion euros ($2.3 billion) to cut dependence on fertilizer imports in an effort to shield farmers from future supply disruptions, Bloomberg reports. “The government’s plan includes developing three fertilizer plants over the next decade to reduce costly imports,” Sébastien Martin, the minister delegate for economy and finance, said at a press conference in Paris Thursday. France will also separately allocate 145 million Euros as part of an emergency plan to support farmers facing Iran war disruptions, said Agriculture Minister Annie Genevard. ”The conflict in the Middle East “is more than a spark, it’s been a tsunami,” said Genevard. “We are facing a real crisis regarding yields and farmers’ treasuries have been in the red for three years, so the situation is extremely urgent.”
Huge typhoon in China threatens crops… China is facing more torrential rain and flooding this weekend from a massive typhoon tracking toward the country’s east coast, following recent severe storms that led to deaths and crop damage, said a Bloomberg report. Typhoon Bavi is forecast to cross the coast of Fujian province on Saturday night, packing top sustained winds of up to 101 miles per hour, the China Meteorological Administration forecast. That would make the system equivalent to a Category 2 hurricane. Bavi is a “gargantuan typhoon, with a wind field size ranking in the top 3% of all western Pacific typhoons of the past decade,” the U.S. Joint Typhoon Warning Center said.The Chinese agricultural ministry and weather bureau issued a joint warning, noting that Bavi’s “long-distance moisture transport” could unleash extreme rains in parts of east China and cause widespread waterlogging on farms. Authorities in Beijing activated its second highest flood emergency response and advised schools to suspend classes.
Malaysian palm oil futures weaker… Malaysian palm oil futures traded lower Thursday, hovering below MYR 4,600 per MT and retreating after recent gains as softer Chicago soyoil prices weighed on sentiment. Also, market participants remained cautious ahead of the Malaysian Palm Oil Board’s monthly report, with Reuters projecting stocks likely hit a record June high as output outpaced demand. In India, the world’s top buyer, June imports fell to a 14-month low on sluggish consumption and a narrowing discount versus rival oils. Still, losses were cushioned by a weaker ringgit, firmer edible oil prices on China’s Dalian exchange, and stronger crude oil, which boosts palm’s appeal as biodiesel feedstock. Demand prospects brightened after cargo surveyors estimated July 1–5 exports rose between 10.6% and 11.1% from the same period in June.
Cattle futures bears may be showing signs of selling exhaustion… August live cattle on Wednesday lost $0.80 to $237.625 and hit a five-week low early on. August feeder cattle rose $1.40 to $362.05. The live and feeder cattle futures markets saw more technically based short selling and weak long liquidation as prices are trending down on the daily bar chart. A “risk-off” day in the general marketplace Wednesday also worked against the cattle market bulls. However, the high-range daily closes do hint the bears may now be exhausted. Livestock stress is likely this week and into the weekend due to hotter temperatures in the Plains states. USDA at midday Wednesday reported still no cash cattle trading taking place so far this week. The agency on Monday said cash cattle trading last week averaged $255.12, which is down $4.22 from the week prior’s average price.
Lean hog futures post strong rebound to keep price uptrend alive… August lean hog futures on Wednesday rose $2.725 to $99.65 and closed at six-week high close. The hog futures market saw a good corrective bounce to keep the price uptrend alive on the daily bar chart and to provide the bulls fresh technical momentum. The latest CME lean hog index is up 11 cents to $91.66. Today’s projected CME index price is up 32 cents at $91.98. The national direct five-day rolling average cash hog price quote for Wednesday was $96.64.